“Skinny” Obamacare vs. Catastrophic Insurance

Michael Barone wrote:

Would you like to have a “skinny” health-insurance policy? Probably not. But if you’re employed by a large company, you may get one, thanks to Obamacare.

That’s the conclusion of Wall Street Journal reporters Christopher Weaver and Anna Wilde Mathews. They report that insurance brokers are pitching and selling “low-benefit” policies across the country.

You might be wondering what a “skinny” or “low-benefit” insurance plan is. The terms may vary, but the basic idea is that policies would cover preventive care, a limited number of doctor’s visits, and perhaps generic drugs.

They wouldn’t cover things such as surgery, hospital stays, or prenatal care. That sounds similar to an auto-insurance policy that reimburses you when you change the oil but not when your car gets totaled.

Band-Aid Health Insurance

Megan McArdle wrote:

But Kathleen Sebelius, the Secretary of HHS, thinks that catastrophic insurance isn’t really insurance at all.

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

She said this in response to a report from the American Society of Actuaries arguing that premiums are going to rise by 32% when Obamacare kicks in, as coverage gets more generous and more sick people join the insurance market.  Sebelius’ response is apparently that catastrophic insurance isn’t really insurance at all–which is exactly backwards.  Catastrophic coverage is “true insurance”. Coverage of routine, predictable services is not insurance at all; it’s a spectacularly inefficient prepayment plan.

Health and Human Services Secretary Doesn’t Understand What Insurance Is

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